New Product Launch Spend: What It Takes To Win In The U.S. Market

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In today’s pharmaceutical industry–where the recent product launch landscape is marked by as many failures as successes—it is critical for launch teams to understand the right level of resources required to give each new product its best chance for gaining a market foothold.

The report provides current data on funding levels necessary bring a new product into the U.S. market, during the launch year and for each of the three years preceding product introduction. Brand and marketing leaders will be able to use the results of this study to identify shifts in spending priorities across the industry and to compare spending levels for their own launch preparation programs against industry averages.Based upon a recent Best Practices, LLC benchmarking study, the report also provides qualitative insights and quantitative metrics that will help companies chart effective budget strategies and allocate funds for new brands. Specifically, the study encompasses the following topics:

The report was based on the results of a benchmarking study that included 27 executives and managers with current or recent launch experience at 23 leading biopharmaceutical companies. About three-quarters of the participants are Directors or Vice Presidents and more than half work within marketing functions or departments. The group represented products in nine different therapeutic areas includingEndocrine/Metabolic, Oncology, Respiratory/Pulmonary, Cardiovascular, Psychiatry, Pain, Ophthalmology, Obstetrics/ Gynecology, and Neurology.

Of the products represented in this report, about two-thirds are marketed primarily to specialty care physicians, and the majority was launched (or expected to launch) between 2008 and 2013. About a quarter of the products were projected to have peak annual revenue above $1 billion, while 44 percent expected the annual revenue to peak at under $500 million. Products reflected a variety of different market-entry conditions from new products in a novel treatment area to products entering a crowded market that includes generics to reformulations.

Key Findings

Rise of Specialty Care Markets & Specialists: Specialists are the primary marketing target for 63% of products in the study. The remainder target both specialty and primary care doctors. None of the products in this study is marketed only to primary care physicians. This seems to reflect the rise of specialty care markets plus the ongoing importance of reaching specialists in successful market entry

Investment Trends: Launch year spending wins a lion’s share of investment resources. For the total benchmark class, Launch Year spend nearly equals the approximate sum of all previous years commercialization investments on average. This seems to reflect two parallel historical trends. First is a rise in launching specialty care products, which require fewer resources and still can return rich rewards. Second is a trend to reduced blockbuster budgets during Launch Years

High Performer Insights: High performers spotlighted comparative outcomes, reimbursement strategies, thought leader relationships and use of novel tools and channels as critical success factors to win in the specialty marketplace

Ramp-up Patterns: There are predictable investments and ramp-up patterns that tend to allocate nearly half of total (aggregated, four-year) spend during the three years prior to the Launch Year and half during the Launch Year. On average, specialty products invested 58% of funds in the first three years and 42% in the Launch Year. This contrasts with the ramp-up for primary care products, where 44% of the total was spent before launch and 56% in the Launch Year.

In today’s pharmaceutical industry–where the recent product launch landscape is marked by as many failures as successes—it is critical for launch teams to understand the right level of resources required to give each new product its best chance for gaining a market foothold... (ID PSM-262)Companies Profiled: Abbott, ProStrakan, Sanofi-aventis, Regeneron, read more ...